I have often talked about the need, when you have health issues or a health history, to do your homework and make sure you find an independent life insurance agent who understands your health challenge and also understands what companies to go to and what companies to avoid.
Too often even experienced agents will focus on one, maybe two companies to run all of their business through. Their logic could be rewards (sales bonuses), or could be a higher commission level if they commit to just one company, or it could be that they have found a company that is easy for them to do business with and they are truly looking for the path of least resistance.
The problem with this approach is that even if you are dealing with perfectly healthy young clients, if you only have a few companies that you will use, or know how to use, in most cases you won’t be doing the best job possible for your clients.
The problem is enormously compounded when the people looking for life insurance fall into what the industry calls impaired risks. These are the clients with diabetes, heart disease, a history of cancer, depression, bipolar disorder and, well, you get the picture. These are the folks who given the wrong agent choosing the wrong company will end up declined for life insurance and have to start all over.
So, the right kind of agent is an independent agent. He or she will represent usually 20 or 30+ companies to make sure they have all health and lifestyle challenges covered. He or she will be an impaired risk agent. These, like me, choose to work almost exclusively on cases that most agents would prefer not to. We pick the ball up where the other agent left it declined. The other agents perceive these clients as too much work.
In a 2009 Agent Media, LIFE Foundation study noted in an article written by Heather Strickland in Agents Sales Journal, it was noted that in 2006 25% of life insurance agents said they offered impaired risk insurance. Keep in mind that offering and being good at providing impaired risk life insurance are not the same. If I had to venture a guess I would say maybe 20% of those that offered were really pretty good at what they did, so 5% of agents. In 2007 that number dropped to 16%, 2008 dropped to 13% and this year is on track for 11%.
From the inside looking out there is a logical reason for this shift. There used to be a company called US Financial that was just plain great at impaired risk business and agents that ran across the business could run it through them with a reasonable chance of success. They left the scene 3 years ago and suddenly you really needed to know what you were doing to succeed. You needed to be the right agent, with the right education and access to right companies. No more slam dunks. It became hard work for those who really didn’t know their way around the other companies that had always had good impaired risk niches.
So, the point being that if 11% of agents claim they “offer” impaired risk life insurance, and 20% of those are actually pretty good at it there are only 2 or 3% of agents out there that fit the “right agent” for the job category.
Bottom line. Make sure you ask a potential agent questions and make sure that agent is asking you questions specific to your health issue. If they don’t seem like they know what to ask or if they can’t answer your questions about how underwriters look at their mortality risk, look a little further. While being declined is not the end of the road in your quest for life insurance, it is also not the quickest route to a successful journey.